Headline: PBOC Sets Stronger Yuan Fixing at 7.0856, Adds Liquidity via Reverse Repos
China’s central bank set a firmer USD/CNY reference rate today, signaling continued support for the renminbi as trading gets underway. The People’s Bank of China (PBOC) fixed the daily midpoint at 7.0856, stronger than the market estimate of 7.1175 and below the previous onshore close of 7.1210. The move comes alongside fresh funds injected into the money market to keep conditions stable.
Under its managed float, the PBOC guides the onshore yuan with a daily midpoint and allows spot USD/CNY to trade within a band of plus or minus 2% around that level. A stronger-than-expected fixing typically indicates the central bank’s intention to lean against depreciation pressure and anchor currency expectations. Today’s setting points to a tighter bias for the yuan at the start of the session.
In parallel, the PBOC conducted 7-day reverse repo operations totaling 119.9 billion yuan at an unchanged rate of 1.40%. The liquidity injection is aimed at maintaining orderly interbank funding and smoothing settlement flows, which can help reinforce currency stability alongside the stronger fixing. Market participants will watch how spot USD/CNY trades relative to the midpoint through the day.
Key Points: – USD/CNY daily fixing set at 7.0856, stronger than the 7.1175 market estimate – Previous onshore close recorded at 7.1210 – PBOC maintains a ±2% trading band around the daily midpoint – 119.9 billion yuan injected via 7-day reverse repos at a steady 1.40% – Stronger fixing signals policy support for the yuan and efforts to curb depreciation pressures
